IB 60x

Reading the OPs previous posts, he sounds like a hysterical coke user. Credibility of statement, zero. Though maybe he doesn't really understand that he really could get sued for saying these things. People are touchy on that subject right now.

I've just spent some time reading the IBKR balance sheets, statements, and reading the whole transcript from their last conference call. They seem to have enough liquid assets, plus a 2b emergency fund. So far they've shown a moderate approach to market making, and I don't see why or how they could possibly go out of business any time soon. If anyone has any proof, 100s of people on this forum would be very interested. Until then, please don't get yourself sued.
 
Quote from Ripley:

Your numbers are completely and utterly wrong. You maybe looking at the MF Global numbers.

IB has approximately 500 M in equity, and total liabilities of 30 B. Meaning that IB is leveraged 60 times. Some of the liabilities is customer funds, but most likely they have access to customer accounts to place trades. Making it even more risky than the leveraged pig that it is.

MF Global down, is IB next? or will it be Penson?
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You are spouting IB bashing nonsense.

My numbers come straight from the IB balance sheet filed with the SEC.

Total equity is $4.6 billion. Total assets are $33.2 billion.

A simple ratio of total assets to total equity is 7.2.

It is better to look at a ratio of total assets at risk to total equity.

Cash and cash equivalents have very low risk and total $11.9 billion. Receivables from customers (margin loans) total $6.8 billion. These receivables are backed by collateral and the $23.3 billion of customer equity, making them low risk. $33.2 billion minus $18.7 billion leaves $14.5 billion of at risk assets.

A ratio of at risk assests to total equity is 3.15.

And just to tick you off even more, IB had $589 million in pretax profits in the first 9 months of 2011.

Penson with a market cap of $35 million is a flea compared to IB.
 
Quote from jeb9999:

My numbers come straight from the IB balance sheet filed with the SEC.

Total equity is $4.6 billion. Total assets are $33.2 billion.

A simple ratio of total assets to total equity is 7.2.
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You don't know how to read a balance sheet. Your numbers are wrong because you are also mistaking preferred shares as shareholder's equity.

IB, on their 10Q filed with the SEC on 8/9/2011 has Total Shareholder's Equity of $530M, and Total Assets of $30B. IB is leveraged 60 times.
 
As an IB customer the temptation to shoot down Ripley in a knee jerk fashion is obviously there, as others have already. That was my first reaction. But I think we should perhaps explore this idea in greater detail if Ripley is willing to provide more facts to support his case.

With IB we can at least track the share price as an early warning sign, and ultimately this proved to be a very good distress signal in the case of MF. The current price performance of IB does not suggest anything to be too concerned about in the near term future. Many FCMs are not listed companies, so we have even less information about their financial state.

If we want to trade futures we must place our funds <i>somewhere</i> so perhaps Ripley could suggest alternative brokers to IB where he feels there is less risk and a more solid business model.

If Ripley cannot suggest alternatives for us to compare with IB where he feels the risk is less then this thread is fairly pointless.
 
Quote from Ripley:


IB, on their 10Q filed with the SEC on 8/9/2011 has Total Shareholder's Equity of $530M, and Total Assets of $30B. IB is leveraged 60 times.
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You are looking at just Stockholders' Equity figure which is 530million.

The Total equity figure is $4.6 billion.

The difference is mostly likely due to the fact that IBKR owns just 11% of IB.

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http://www.sec.gov/Archives/edgar/data/1381197/000138119711000033/ibkr_10q2q2011.htm
 

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Quote from benwm:

As an IB customer the temptation to shoot down Ripley in a knee jerk fashion is obviously there, as others have already. That was my first reaction. But I think we should perhaps explore this idea in greater detail if Ripley is willing to provide more facts to support his case.
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Ripley probably works for, or more likely has an ownership interest in a smaller IB competitor company.

But even more likely he is just another losing trader, and has recently shorted IBKR stock.
 
Quote from Millionaire:

You are looking at just Stockholders' Equity figure which is 530million.

The Total equity figure is $4.6 billion.

The difference is mostly likely due to the fact that IBKR owns just 11% of IB.

attachment.php


http://www.sec.gov/Archives/edgar/data/1381197/000138119711000033/ibkr_10q2q2011.htm
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bingo on the 11%.

This also isn't the place for a basic accounting lesson but let's just start with the simple fact - if a client deposits $1 billion in funds with a broker it doesn't increase leverage. Simple accounting would classify offsetting assets and liabilities. Those posting figures like 60 to 1 wouldn't get past accounting 101. Ripley, I should say quit before you further emphasize your ignorance, but it's too late. I'll leave it at - sorry but you fail.
 
Even MF Global only had 26 times leverage before it blew up: $1.5B controlling $40B in total assets.

It's the Total Shareholder's Equity that counts, not Total Equity, which includes preferred stock etc which is actually a debt obligation but treated as equity on balance sheet. And customer accounts are never treated as equity, but as liabilities. And IB's 60x leverage factor is partly attributed to that, but at the same time it is extensively leveraged compared to other comparable brokerage firms.

The only thing you can do as a client at IB is to keep you eyes wide open for what they are doing with their client funds, their capital etc.
 
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